Elsevier

Research Policy

Volume 29, Issue 2, February 2000, Pages 135-147
Research Policy

Technology transfer in transitional economies: a test of market, state and organizational models

https://doi.org/10.1016/S0048-7333(99)00056-6Get rights and content

Abstract

Two competing views dominate the debate on restructuring the largely military R&D sectors in transitional economies. Liberals view unadulterated market forces as the key to stimulating technology adaptation to commercial markets. In contrast, most policy and senior management stress the “market failures” perspective that rely on state subsidies for fostering technology commercialization. By drawing on case study as well as survey research data from 100 Russian scientific institutes, this paper suggests the importance of a third, organizational perspective. Inter-firm relations, as well as market and subsidy factors, are all considered for their effectiveness in driving technology transfer attempts. Particularly important to such attempts is the spin-off process, by which old state institutes incubate new firms and, hence, new and important partners in their struggle to commercialize state R&D.

Introduction

Key to the success of market transition in the formerly command economies is the success of their economic recovery. In the 7 years since the demise of the Soviet Union, production has been over 40% in Russia, a greater drop than experienced in the US during all of the “Great Depression”. Command economies were essentially “buyers markets” and few industries outside the military complex experienced any pressure to compete or meet consumer demand (Berliner et al., 1983). As imports flood the domestic markets across the Eastern Europe (EE), the local industry needs to upgrade its manufacturing to survive. However, with the exception of the military, Soviet industries had no experience on market competition and consumer demand. A fundamental aspect of their adaptation to a market economy therefore hinges on the ability to draw commercial applications from their immense experience in military R&D.

Two competing views dominate the debate on restructuring the science and technology (S&T) sectors in transitional economies. Liberals view unadulterated market forces as the key stimulus of technology adaptation while the majority of senior managers expect state direction and support to help them through the transition (Sanchez-Andres, 1995). This paper suggests a third, organizational perspective that considers institutional restructuring at the firm level as central to the dynamic of economic change and technology adaptation.

Across EE and the former Soviet Union (FSU), R&D institutes are responding to their funding crisis by a ubiquitous process of fragmentation and implosion. Bereft of cogent and fungible adaptation policies, most scientific establishments launched their own restructuring strategies. By creating new organizational forms of mixed ownership, they used new organizational forms and relationships to help negotiate the demands of privatization while maintaining capacity for basic scientific research. This process of internal canabalization has been the topic of much concern and controversy but of little systemic research. This paper will juxtapose an organizational perspective to a market and statist approach to restructuring of Russian S&T to argue for its greater explanatory power in periods of systemic transformation.

What follows is a brief, case study of fragmentation as a strategy for technology adaptation at one particular Russian scientific institute. Tentative proposals will follow on the role of daughter companies, and the other key variables that emerge in discussion of the three central models. Finally, survey data from 100 formerly state-owned Russian science establishments are explored on the basis of the three hypotheses. The findings, which suggest the particular salience of the organizational model over the statist and market approaches, are then discussed.

Section snippets

An illustration of R&D restructuring in Russia: the Central Dynamics Aerohydrodynamic Institute

In response to their dramatic loss of state support, many R&D institutes in Russia began to create new spin-off firms and turned themselves into defacto holding companies. The details of this new organizational forms varied across institutes but, in essence, most shared a hybrid model of ownership which combined public with private holdings. One of the pioneers of this form early in the transition period was the Central Dynamics Aerohydrodynamic Institute outside Moscow, more commonly referred

The organizational perspective

The organizational approach to innovation outlines those institutional characteristics most associated with successful technology adaptation. While no one theory captures the complexity of these issues, several characteristics emerge repeatedly among organizations that have been adept at adapting innovation. In particular, the flexibility and horizontal linkages of firms have been noted for their support of dynamic feedback between the different stages in moving from science to market. (von

Overview of the sample

The data were gathered in the spring of 1995 and consist of 100 Moscow area scientific institutes which worked to varying degrees for the military industrial complex. The sample was randomly drawn from the membership list of the League of Defense Enterprises, which is a political lobbying group that includes enterprises under Roskomoboronprom, the State Defense Committee, as well as its secondary suppliers. Our sample was limited to the first group as well as their satellite firms. Spin-offs

Findings

The tentative hypotheses discussed above generated nine independent variables (that are described in Appendix A) and two size control variables. These were analyzed using ordinary least-squares regression on an index of technology adaptation activities as the dependent variable. The results of this regression are presented in Table 2 below. As the table indicates, none of the coefficients generated by the market perspective were statistically significant. Neither insider nor outsider

Discussion

The lack of support in the regression described above is not to say that monetary stringency is harmful to technology transfer since its opposite hyperinflation would make needed investments even less likely. This tentative study does lend support to the growing recognition, however, that monetary controls and macroeconomic restructuring are by themselves insufficient measures for spurring technology transfer and commercialization attempts in transition economies (Dyker and Perrin, 1997).

Conclusion

The import of this tentative study goes beyond the question of S&T restructuring to suggest some drawbacks of statists and market approaches to understanding social and economic change. The market model outlines important sets of criteria important for the introduction and functioning of market signals. However, it has severe drawbacks in facilitating transition and the very conditions that it prescribes. In the first place, the push to privatize as a means for achieving appropriate incentives

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